Find ways to cut down bad loans, Jaitley tells PSU banks
21 November 2014
In a clear echo of his predecessor P Chidambaram, union finance minister Arun Jaitley expressed concern to bank chiefs over rising bad loans, and asked them to find ways to bring down their non-performing assets (NPAs).
"Over the last 2-3 years, on account of [economic] slowdown, one area of concern is that the NPAs have risen. Therefore what proactive steps should be taken to ensure that NPAs come down had to be discussed," Jaitley told reporters after a meeting with public sector bank chiefs in New Delhi today.
Jaitley also asked banks to take steps to ensure smooth credit flow to projects.
"One of the other area of concern, we have suggested to the banks that they take proactive steps in supporting various projects so that credit offtake in these projects takes up in a big way," he said.
According to a report by research firm ICRA, PSU banks' gross NPAs are estimated at 4.4-4.7 per cent as on March 31, 2015, as against 4.4 per cent as on 31 March, 2014 and 4.6 per cent at the end of June 2014.
He said the government has taken steps to streamline the process of appointment of CEOs and EDs of public sector banks, to introduce objectivity in the process. This will play a major role in making them a professional organisation, he added.
Jaitley said that the functioning of public sector banks and the decision making process must be influenced by professional reasons and not collateral ones. He said any external influence would be considered as a disqualification. The finance minister complemented the bankers for their excellent performance with regard to the implementation of the Pradhan Mantri Jan Dhan Yojana (PMJDY) in a time bound manner.